KUALA LUMPUR (June 14): Electronic circuit board maker GUH Holdings Bhd (KL:GUH) said on Friday it has scrapped a plan to develop a lithium battery assembly plant in Malaysia.
The company and its joint venture (JV) partner, Chinese battery manufacturer Shenzhen Xixin Electronic Technology Co Ltd, have mutually agreed to terminate the agreement signed in November last year, GUH said in an exchange filing.
“No battery assembly plant has been established, no equipment has been purchased, and no shares in the JV have been transferred to Xixin pursuant to the cooperation agreement,” GUH said.
In November last year, GUH, through its wholly owned subsidiary GUH Capital Sdn Bhd, signed a cooperation agreement with Xixin, leading to the formation of a JV company called GUH Power Sdn Bhd.
The now-scrapped plant would have had to be fully funded by GUH, with Xixin providing technology and assistance in planning the entire plant layout, production line, and detailed specifications. Xixin will also help set up a power battery pack production line.
GUH Capital would hold a 75% stake in the JV under the deal while Xixin would hold the remaining 25%. The parties planned to establish a battery assembly plant in Malaysia to supply lithium battery products and services to markets outside China.
Under the termination announced, no charges, fees, expenses, or payments would be demanded or payable by either party, and neither party would be liable for any loss or damage resulting from the termination of the agreement.
Further, the grant of licence for intellectual property from Shenzhen Shiwei Electronic Technology Co Ltd to GUH Power will also be terminated immediately, and the two original copies of the grant are returned to Xixin immediately.
The termination does not have any financial impact on the company and its subsidiaries, GUH added.
Shares of GUH were up 0.5 sen or 1.22% ahead of the announcement. At a closing price of 41.5 sen, the company is valued at RM115.63 million.